War of wages: Some legislators proposing state minimum wage to combat with state’s poverty

January 27, 2006

By Marlena Hartz

Judy Crisp spends six days a week inside a cramped cigarette shop on a bumpy Clovis side street. For every hour she spends there, she earns $5.75. That is 60 cents above the federal minimum wage level.

The single mother of two teenagers said she can barely afford the apartment where she and her sons live. She cannot afford cable or telephone service.

“It’s just me (paying the bills),” Crisp said. “And you know how boys are. They want the name-brand shoes, the name-brand jackets. I can’t afford it. I wish I could. But I can’t.”

Crisp is one of 123,000 workers in New Mexico who would likely get a raise if the state agrees to raise the minimum wage. That group is comprised of more men than women, and more Hispanics than non-Hispanics, according to New Mexico Department of Labor Secretary Conroy Chino.

Gov. Bill Richardson and other lawmakers have suggested raising the state minimum wage to $7.50 an hour.

The federal minimum wage has been frozen since 1997. Seventeen states have raised minimum wages since then, according to the Department of Labor Web site.

Those states have built “a social safety net for families living close to the edge,” according to David Buccholz, research director for the Corporation for Enterprise Development.

“As an outsider looking in, there are some pretty dire numbers in New Mexico,” said Buccholz, who is based in Washington, D.C. “The numbers for New Mexico, in terms of some of the pay issues and in terms of earning and benefits, are among the lowest in the country.”

Boosting the minimum wage, he said, is one way the state could bridge the growing economic chasms within New Mexico and between it and the majority of the country, Buccholz said.

But it isn’t the only way. Investing in education and supporting local entrepreneurs are two others, he said.

Critics argue raising minimum wage would harm more than it would help. Small business owners and rural communities, they say, will be hurt most by a wage increase.

After all, the words painted in light blue across his shop window — “we make pets affordable” — may have to be scraped off if lawmakers decide he must give his employees a raise.

“For me it would be difficult,” he said, as he finished wiping the glass of a fish aquarium. “I would probably have to lay off somebody or raise the prices.”

He employs five people. His workforce is usually comprised of high school students, high school diploma holders, or senior citizens. “We don’t have a workforce I’d be willing to pay $7.50 an hour for,” Lewis said.

Chris Bryant, owner of Foxy Drive-In, tells a similar story.
As an employee rushed by him, balancing three brown paper bags full of food, he said he also would have to raise prices if the state mandated a pay increase.

“We are also experiencing hardships with rising costs — plastic, cups, everything. Altogether, it’s almost more than a small business can handle,” Bryant said.

He has an advocate in Senate Majority Leader Michael Sanchez, D-Belen, who proposes to offset the adverse effects of the raise by permitting small employers some tax credits for three years.

He also has an advocate in Kim Huffman, executive director of the Roosevelt Chamber of Commerce. When it comes to wage laws, he said whatever is best for small business owners is best for the community.

“A number of employers may not be able to afford having as many employees,” Huffman said.

The employees squeezed out of the picture may be the very ones the minimum wage hike is intended to help, according to economic expert David Hemley, who works as a professor of finance at Eastern New Mexico University. Research indicates employment levels drop when the minimum wage is increased, he said.

“What it does do is encourage more kids to go out into the market place,” Hemley said.

With the lure of cash, some high school students are less likely to earn a degree or obtain the education necessary to catapult them — and the rest of the state — out of poverty, Hemley said.

“It’s (minimum wage) a very emotional issue,” Hemley said. “It’s been a political football for years and years.”

Freedom Newspapers of New Mexico writer Tony Parra contributed to this report.